The parties contracted on a JCT with Contractor’s Design 1988 Edition. Clause 39A provided that disputes could be referred to adjudication. Application No. 20 on 28 October 2004 was for the gross sum of £748,447.64. No payment was made and a withholding notice was not issued.
The claimant notified the defendant that they intended to refer the dispute to adjudication. The notice was sent by special delivery to the usual place of business and an application was made to the RICS for an adjudicator. The notice of adjudication did not reach the defendant, and so a second notice of adjudication was served on 15 December. On the same day a further application was made to the RICS to re-nominate the same adjudicator.
The defendant argued that there was no dispute at the time of the reference because the service of the notice was not in accordance with the contract. Second, the contract required the notice to be issued before an application was made to the RICS. Third, there was a breach of natural justice in that the adjudicator asked the claimant to provide evidence in respect of which interim payments had been made and how they had been made.
Reference
Judge Kirkham held that the first issue as to service had been put to the adjudicator, and therefore he had jurisdiction to decide the matter and the parties were bound by it. In any event, there was an expectation between the parties that applications would be made by email and so service of application no. 20 was effective.
In respect of the second issue she noted that while jurisdiction arose from the notice, such that an appointment should be made after the notice the contract did not stipulate that an application to the RICS should be made after the notice of adjudication had been served. Section 108 did not prescribe the timing of the notification with regards to the notice of adjudication. However, there was no question of ambush here because of the failed attempt to commence adjudication. The defendant clearly knew that the claimant intended to refer the matter to adjudication. The claimant therefore followed the procedure envisaged by the contract.
Finally, the adjudicator did not ignore the agreed position with regards to the service of application payment no. 20. He merely invited submissions and did not obtain information from one party without notifying the other nor did he construct one party’s case (Balfour Beatty v London Borough of Lambeth [2002] BLR 288 considered). The adjudicator therefore did not breach the rules of natural justice. The claimant was entitled to summary judgment.
*Full case details
Palmac Contracting Ltd vs Park Lane Estates, 22 March 2005, TCC, HHJ Kirkham, [2005] EWHC B1 (TCC)
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Postscript
The first challenge, relating to service of documents was essentially a technical challenge. The adjudicator and the judge adopted a practical approach, holding that the parties had agreed to circulate documents by email, which was effective.
The ability to nominate an adjudicator before serving the notice of adjudication is of greater interest. It will come as a surprise to many to find that a referring party can request the nomination of an adjudicator before the respondent has been served with the notice of adjudication.
